Shell eyes deal for Endeavor Energy as price drops

Royal Dutch Shell is said to be negotiating to acquire Endeavor Energy Resources. >>>PHOTOS: Roughnecks through the years...

Royal Dutch Shell is said to be negotiating to acquire Endeavor Energy Resources. >>>PHOTOS: Roughnecks through the years...

Photo: KBazin, Getty Images/iStockphoto

Photo: KBazin, Getty Images/iStockphoto

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Royal Dutch Shell is said to be negotiating to acquire Endeavor Energy Resources. >>>PHOTOS: Roughnecks through the years...

Royal Dutch Shell is said to be negotiating to acquire Endeavor Energy Resources. >>>PHOTOS: Roughnecks through the years...

Photo: KBazin, Getty Images/iStockphoto

Shell eyes deal for Endeavor Energy as price drops

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Royal Dutch Shell Plc is in negotiations to buy Endeavor Energy Resources LP for about $8 billion, according to people familiar with the matter, or roughly half as much as the Texas oil producer was expected to fetch when it put itself on the block this year.

Exxon Mobil Corp., Chevron Corp. and ConocoPhillips also weighed bids for Endeavor but their interest has waned, said the people, who asked not to be identified because the matter isn’t public.

Discussions with Shell haven’t reached an advanced stage, one person said. They’ve also been complicated by Endeavor Founder Autry Stephens’s desire to retain a large quantity of its mineral rights, this person said, or ownership of untapped oil entitling him to royalties when drilled.

That’s made the Midland, Texas-based company less valuable than the $15 billion it was initially expected to fetch in a sale, the people said.

No deal has been reached and Endeavor could opt to remain independent, the people said. Endeavor is also considering going public in 2019, people familiar with the matter said in November.

“Portfolio review is an ongoing process to ensure we have the right mix of assets to deliver maximum value to our shareholders while delivering on our business strategy," a representative for Shell said in an email. "We do not, however, comment on current or potential commercial actions or agreements.”

Representatives for Endeavor, Exxon, Chevron and Conoco declined to comment.

Endeavor controls drilling rights on more than 300,000 acres of mostly undeveloped land in the Permian Basin of Texas and New Mexico, making it one of the largest closely held companies in the most productive oilfield in the U.S.

Stephens, a billionaire who starred in a reality show, founded the entity that became Endeavor in 1979 after stints with Humble Oil, now part of Exxon, and the Army Corps of Engineers, according to Endeavor’s website. He and his family own the company.

Shell has been selling assets around the world to pay down debt after buying BG Group Plc for about $50 billion in 2016. The Hague, Netherlands-based company has about 260,000 acres in the Permian through a joint venture there with Anadarko Petroleum Corp., according to its website.

--With assistance from Kevin Crowley.

To contact the reporters on this story: Kiel Porter in New York at kporter17@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Matthew Monks, Michael Hytha